Maziarz Corporation produces and sells a single product. Data concerning that product appear below:

-Assume the company's target profit is $16,000.The dollar sales to attain that target profit is closest to:

Question

Maziarz Corporation produces and sells a single product. Data concerning that product appear below:
 
-Assume the company's target profit is $16,000.The dollar sales to attain that target profit is closest to:

Quizplus · Accepted Answer

Unit CM = Selling price per unit - Variable expenses per unit
= $220.00 per unit - $72.60 per unit = $147.40 per unit
CM ratio = Unit CM ÷ Unit selling price = $147.40 per unit ÷ $220.00 per unit = 0.67
Dollar sales to attain a target profit = (Target profit + Fixed expenses) ÷ CM ratio
= ($16,000 + $548,328) ÷ 0.67
= $564,328÷ 0.67
= $842,281

Maziarz Corporation Produces and Sells a Single Product